Interested in training for your team? Click here to learn more

Structuring Earnouts in M&A Transactions: Effective Approaches to Bridging the Valuation Gap

Drafting Provisions that Protect Buyers and Sellers and Reduce Post-Closing Disputes

Recording of a 90-minute premium CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, May 10, 2018

Recorded event now available

or call 1-800-926-7926

This CLE course will guide deal counsel in negotiating and structuring earnout clauses in M&A agreements that benefit buyers and sellers and reduce the likelihood of post-closing disputes.


M&A transactions routinely include earnout provisions as a valuation-bridging mechanism to alleviate concerns by both parties about tendering or receiving a fair purchase price. Earnouts can allow either an upward price adjustment post-closing—when sufficient value is created to justify a higher purchase amount—or innovative financing for an originally agreed upon price.

While earnouts are a beneficial tool for parties in M&A deals, transactions involving earnouts are complicated and fraught with risk. Earnouts often deter disagreements during the negotiation of the deal price only to result in post-closing disputes over the earnout itself.

Counsel must draft explicit, specific, business-contextualized provisions and procedures relating to the calculation of the earnout and the parties’ respective obligations.

Listen as our authoritative panel explains recent trends in the use of earnouts, the pros and cons of including them in M&A deals, and strategies for structuring earnout terms in a way that benefits and protects both buyers and sellers.



  1. Earnouts
    1. Current market trends
    2. Advantages and disadvantages of earnouts
    3. Relevant performance benchmarks
  2. Structuring earnout provisions
    1. Determining operating control issues
    2. Dealing with unanticipated events
    3. Protecting against fraudulent actions
    4. Post-closing activity by buyer and seller
    5. Resolving conflicting positions
    6. Tax implications


The panel will review these and other challenging issues:

  • What approaches are effective in negotiating performance benchmarks for deals involving earnout provisions?
  • What post-closing concerns should buyers and sellers anticipate and address during deal negotiations?
  • What are the tax issues that counsel must understand and consider regarding earnouts?


Herman, Dimitry
Dimitry Herman

Founder and Managing Partner
Herman Law

Mr. Herman serves as outside general counsel to growing technology companies and as deal counsel for venture...  |  Read More

Flanagan, Christopher
Christopher M. Flanagan

Locke Lord

Mr. Flanagan’s general corporate and partnership tax practice focuses on tax planning and analysis in the...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video